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It is a study of how firms make decisions about their work, consumer-related consumption patterns, how investment occurs, and about the pricing of products and services. Economics is…
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Download file to see previous pages... Economics considers resource availability, such as land and capital as well as factors of production.
An economic model serves as an analysis of financial considerations. Economic models are theoretical constructs using charts, graphs, or other mathematical analysis tools to better understand how to make financial, business, or investment decisions. Such models consider many different variables, such as consumption and consumer incomes, to assist businesses in forecasting production or pricing their products; as one example. Government uses economic models to plan logistics or even create economic policy (or monetary policy) based on observable trends in the economy or environment. It can include accounting modeling to measure credits or debits in industry, or even scenario planning to guide executive decision-making related to finance and capital investment.
Microeconomics involves the study of economics as it pertains to the individual. It involves studying firm finance and resources, individual consumer finance and activities, and the worker related to their productivity or income allocation. As one example, microeconomics would measure the relationship between household income and the volume of products consumed, such as household budgeting planning and banking needs.
Macroeconomics is more in-depth and measures the whole of an economy. It would consider all consumers related to a national economy. Issues of consumer supply and demand, related to price setting, would be an example of macroeconomic study. For government, it might also measure the income capacity of many different urban regions to determine what area of the country would be best served for investment in infrastructure projects.
Normative economics measures what should be, while positive economics studies what actually is. Normative economics is subjective and is based on value judgments ...Download file to see next pagesRead More
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